CACEIS NEWS 57 EN

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THE ASSET SERVICING JOURNAL

APRIL 2019 N 0. 57

www.caceis.com

CACEIS in Germany High growth potential - page 2

Securities Class Actions offer A key role in protecting investor assets - page 3

Partner for the agri-food sector Key player in agricultural commodities futures - page 4

Editorial

Both operations are expected to be finalised by the end of 2019. Their completion is obviously subject to the usual conditions, including regula- tory approvals and consultation with the relevant works councils. CACEIS would be strengthened in its role as a key global player in the custody and asset servicing markets. With these announcements, we con- firm CACEIS' targeted growth strat- egy to expand our coverage of the European, Asian and Latin American markets, and to enhance our product offering to serve current and future clients. CACEIS is simultaneously continu- ing to roll out its commercial offer in Europe. We are winning new cli- ents in all locations, for example in Germany, a market with great growth opportunities in fund administration and in cash equity clearing solutions, for which CACEIS in Germany has developed a centre of excellence. Our product offer is rapidly expand- ing. For example, we provide a solu- tion that contributes to the protection of investors' assets, the "Securities Class Actions" service. It consists of systematically informing our cli- ents about group actions concerning

securities held in their portfolio, and investigating the recovery of compen- sation paid out as part of the dispute settlement. This offer, which we have developed in partnership with a major international law firm, covers all asset classes in the main financial markets. In this issue, you will discover our full range of execution and clearing services on agricultural commodities. This offer fully meets the expecta- tions of the agricultural and agri-food sector and is now expanding interna- tionally, with the support of our share- holder, the Crédit Agricole Group. The digital innovation and trans- formation approach remains a pri- ority for CACEIS in 2019. We are proud to have been recognised once again by the market, as CACEIS won the Innovation Award for the third consecutive year, at the 30 th Global Custodian Leaders in Custody Awards on March 28 in London. We are awarded the "Innovation in Client Experience" prize for our approach to improving the user experience with the CACEIS Innovation Lab. Our capacity for innovation was re- cently illustrated with the deploy- ment of a new application, SHERPA, which simplifies and secures access to our OLIS portal. The digital trans-

formation of CACEIS will continue across all OLIS functionalities so that our web portal becomes a collabora- tive work site between clients and CACEIS’ teams. To better understand digital mar- ket expectations, we partnered with Funds Europe at the end of 2018 to gather our clients' opinions on the impact of artificial intelligence in the investment fund sector. The results, available on www.caceis.com, con- firm that AI is now considered an es- sential tool in our industry, both at the front, middle and back office levels. These results confirm CACEIS' strat- egy, which integrates this technology into its developments thanks to the expertise of its 3D business line. The human element is central to our business and will remain so, but the assistance capabilities that artificial intelligence and other technologies, such as Robotics and Blockchain, will give our staff, and therefore our clients, are a significant advantage in an increasingly competitive industry. CACEIS is at the forefront of tech- nological developments to ensure we can deliver the robust security, data insights, information accuracy and business efficiency that our clients re- quire now and in the future

JOE SALIBA, DEPUTY CEO, CACEIS

O n 17 April 2019, our share- holder Crédit Agricole S.A. jointly issued with Santander a press release informing the mar- ket of the project of merger between CACEIS and Santander Securities Services ("S3"), the subsidiary spe- cialised in asset servicing of this ma- jor international banking group of Spanish origin. The new entity, which will keep the name CACEIS, would be 69.5% owned by Crédit Agricole S.A. and 30.5% by Santander. It would com-

bine the activities of CACEIS and Santander Securities Services in Spain and Latin America (Brazil, Mexico and Colombia). This transaction is in addition to that of CACEIS and KAS BANK, a long-standing player in securities custody and fund administration in the Netherlands. Last February, we announced an agreement on a recom- mended cash takeover bid submitted by CACEIS for the entire share capi- tal of KAS BANK.

Bella Center Copenhagen 24-27

CACEIS'S TEAMS LOOK FORWARD TO WELCOMING YOU TO OUR STAND

June 201 9

2 caceis news - N 0 . 57 - April 2019

CACEIS in Germany, high growth potential InterviewwithThies CLEMENZ, Managing Director of CACEIS in Germany

What role does the German branch play in the CACEIS Group? The branch in Germany is a key pillar of the CACEIS Group. Germany represents one of the strongest European economies and one of the largest fund mar- kets for the group. CACEIS has been actively supporting clients in Germany for over ten years, and our clients here have access to CACEIS’ full range of products and services for all asset types. Obviously, Germany itself has a very large economy and of- fers CACEIS great potential for growth. However, it is not just the size of the funds market that makes Germany such a key development priority for us. Having a presence in the German market enables the Group to offer all CACEIS cli- ents wider coverage of the entire European market. Offering the same range of services throughout Europe enables clients to market their funds across many markets, with the added benefit that servic- es are adapted to conform to each individual country’s regulatory and cultural specificities. However, our German office does have a number of factors that set it Why is Germany such an impor- tant market for CACEIS?

apart. We are the German market leader in cash-equity clearing ser- vices for broker-dealer clients and securities trading banks. Germany has now become the group’s cen- tre of excellence for this, servicing both German market clients and international clients from through- out the CACEIS network. Another strong point is trustee ser- vices for real estate funds, which we have seen expand rapidly in recent years, making us one of the top three real estate fund trustees in Germany. CACEIS ranks among the top 10 trustees in Germany, and as already mentioned, we rank third in terms of real asset funds. CACEIS is clearly a complete asset servicing player, providing a one-stop-shop for its clients. We offer the group’s full range of custody and fund ad- ministration services in addition to the trustee function, no matter the asset type. Unlike some asset servicing providers, our products are designed to incorporate a high level of flexibility which enables us to tailor services to each cli- ent’s individual needs. Our client relationship management is also carried out directly from Germany Where does CACEIS rank in the German funds market?

which, from experience, we know our clients greatly appreciate as it fosters close business relationships and an in-depth understanding of their business. Can you tell us about the teams at CACEIS in Germany? CACEIS in Germany has two of- fices - one in Frankfurt and another in Munich. The Munich office ac- counts for the greatest number of staff, but the Frankfurt office is rapidly growing in size. From these two offices, our 450 experienced employees provide high quality servicing to clients operating in the German fund industry. We ensure all our employees benefit from con- tinuous professional development courses to ensure they are able to offer optimal day-to-day servicing in terms of regulatory develop- ments, business practices, language courses and industry trends. This programme helps create well-in- formed employees who understand business needs. However, we also have a high num- ber of specialists with expertise in areas as diverse as regulatory re- porting to real assets. Client focus is central to our staff philosophy and the reason why we spend so much time and resources on en- suring our staff are well trained and informed - we therefore have

low levels of staff turnover and have a good proportion of employ- ees who have been with the group for many years. What are CACEIS Germany’s strategic goals and how do you aim to achieve them? Our principal goal is to contribute to the growth and sustainability targets of the CACEIS Group by providing strong client support and constantly improving and broad- ening our buy-side service range - from trustee services to custody and fund administration – for secu- rities clients. In addition, we intend to consolidate our leading position

in the growing real asset funds in- dustry by further developing the trustee function, but also by offer- ing our middle office outsourcing services via our successful fund administration business. On the sell side, we are actively working on bringing on new domestic cli- ents, and are seeking to attract an increasing number of international clients. Finally, by leveraging our range of reliable products and ser- vices together with our excellent client servicing, we aim to increase market awareness of the CACEIS brand and broaden our reputation as major asset servicing player in the German market

Third-party administration in Germany is a fast growing activity

Founded in 2016, CACEIS Fonds Services is the German entity that provides clients with the international expertise of the CACEIS Group in fund administration. Its service offer meets the need of a growing demand for outsourcing.

offering a one-stop shop for any product and market-leading services from fund adminis- tration to depositary, throughout Germany, Europe and the world. One single partner covering all servicing means one central contact for all servicing needs, consolidated reporting from across your network, efficien- cy gains, and enhanced service levels for your investors, wherever they are. CACEIS’ offer is highly modular, and companies have the option of mandating only for the more com- plex or resource intensive areas, or remain- ing with a current provider and requesting CACEIS to consolidate reporting data from both groups. In the past, the real asset segment has bene- fited least from task automation, with paper- based methods and manual processes. We want to change this and, as an exemple, we will, in 2019, transform into a fully digitised invoice workflow system. Bookings and pay- ments will be generated automatically. There will be also a human four-eyes principal check prior to final release. Andreas Pade states: “Clients see many ben- efits such as this fully digitised invoice service when they select CACEIS as their real asset administrator. We are one of the few providers in Germany offering fund administration and depository services for all asset types and many managers are either currently using our ser- vices or in discussions for an outsourcing deal. CACEIS is fully committed to the German mar- ket and to providing cutting-edge servicing.” REAL ASSET FUNDS (CLOSED-END FUNDS)

M any investment companies choose to outsource their in-house fund admin- istration and related middle-office activities, and administrators like CACEIS have helped industrialise and automate the activity, driving down costs and increasing companies’ flexibility.

managers are opening up to the benefits of im- plementing an outsourcing model. “We are seeing a confirmed trend on the German market, with more managers rethink- ing their current in-house administration strat- egy in favour of outsourcing,” says Andreas Pade , Managing Director of CACEIS Fonds Services in Germany. CACEIS is a leading global provider of administration services and has particu- lar expertise in Germany with real asset funds. It fulfils the administration needs of a broad range of clients in Germany and other European countries from large capi- tal management firms to more boutique-style operations. Outsourcing fund administration tasks eases the burden of ensuring ongoing compliance with changing regulatory require- ments. It also frees up company resources from heavy investment into IT systems and process automation, while offering far greater flexibil- ity for coping with activity volume spikes when they occur. Across the world, companies are making the de- cision to isolate their business investment from the shifting regulatory landscape and constant IT development required with in-house admin- istration. With the right partner that understands their business and can pool resources of a large number of clients to develop world-class sys- tems and services, managers can remain in full control of their business. Outsourcing helps managers better direct company resources and

lets them concentrate on their key area of exper- tise - creating investor value. In many cases, an outsourcing operation in- volves a staff lift out, which ensures not only that companies can justify the strategy to their staff, but also that competent staff with an in- timate knowledge of their company are within the service. Any outsourcing operation takes time to understand fully and plan before imple- mentation, and CACEIS has the in-depth exper- tise and experience to ensure it is a success for companies’ business, and their staff, from the outset. SECURITIES FUNDS Third party administration of securities funds is a more mature market than for real asset funds, and managers have long been outsourc- ing the process. Despite this, the market for third party administration services still holds great potential in terms of companies looking to consolidate both fund administration and depositary services with one provider. Many are also reconsidering their current provider as they seek support from a provider with a large geographic footprint to assist them in achieving their business development objec- tives outside the home market. OPEN-ENDED REAL ESTATE FUNDS Whether specialist in one asset type or offer- ing a range of products from across the asset spectrum, a large comprehensive asset servic- ing player like CACEIS can cover every base,

FUND ADMINISTRATION FOR ANY TYPE OF ASSET

Demand for administration services, especially for real asset funds, is rising sharply and many

ANDREAS PADE, Managing Director sof CACEIS Fonds Services in Germany

N 0 . 57 - April 2019 - caceis news 3

CACEIS’ Securities Class Actions offer plays a key role in protecting investor assets

C lass Action lawsuits are a widespread practice in the US. They allow shareholders, of a company that committed a fault which negatively affected an asset, to join in a group action to seek repara- tion before a court. Such processes remain rare in Europe. "Institutional investors are now be- ginning to show a strong interest in class actions, management compa- nies are increasingly seeing them as a way to act in their investors’ best interests, so being aware of potential class actions as they develop is es- sential," says Renée Simoes , Group Product Manager at CACEIS. The majority of the service is in sett- lements, known as “passive participa- tion” of the post-litigation phase. To deliver market-leading service in this area, CACEIS works closely with DRRT, an international firm speciali- sing in group actions and compensa- tion recovery. Clients can fully rely on our market-watch function which identifies any developing class action lawsuits and cross-checks the tar- geted securities with those in client portfolios, ensuring:

 information on any ongoing collec- tive action process on securities held in a portfolio (shares and bonds),  coverage of “passive participation” settlements, which usually take place in the US, but also in other juridic- tions, including client notifications, claim filing and monitoring, and crediting investor accounts with any recovered compensation,  an assessment of financial benefit of being involved in collective actions requiring active participation. Our partner DRRT has the experience to actively represent clients in this type of action and may assist clients directly.

"Any client taking advantage of CACEIS’ custody services is eligible to sign up for our Securities Class Actions offer. We also keep OLIS, our web portal, constantly updated with the latest information on relevant class actions, adds Renée Simoes . This offer forms a key part of CACEIS’ investor protection ap- proach and helps meet ongoing regu- latory challenges. It is designed to assist asset managers and institutio- nal investors in demonstrating they are acting in the best interests of their clients, maximising investor value, while relieving the administrative burden of such processes

RENÉE SIMOES, Group Product Manager, CACEIS

Group actions first came onto the scene in the United States in the 1950s, and in recent years, they have become more commonplace in Europe and Asia. CACEIS’ service keeps clients informed of and enables them to take part in any class action processes for securities held in portfolios. The service also assists in the collection of compensations paid out as part of the dispute settlement.

DRRT's TESTIMONIAL Joseph GULINO, Assistant Managing Partner

Why have class actions developed in recent years outside the United States? A 2010 US Supreme Court ruling ( Morrison v. National Australia Bank ) limited the scope of class actions in the US. This decision excluded participation by American and non-American investors in class actions before American courts when the securities were acquired outside the United States. For non-US companies, basically only investors who have purchased ADRs (American Depositary Receipts) can now take legal action in the United States, which considerably limits options for recovery. Institutional investors who have invested in European companies may only initiate collective actions generally in the jurisdiction where the securities were purchased. This collaboration allows us to serve in the clients’ best interests, in complete security and with the full support of DRRT and CACEIS. What is the current share of investors participating in class actions? As for institutional investors in the United States, the birthplace of class actions, about 30% of them participate in so-called passive actions. U.S. pension funds have long had an obligation to monitor class actions to defend the rights of their clients. They may even fear being sued in the event of a lack of monitoring of actions or non-participation in class action settlements. Outside the United States, investors are becoming accustomed to these practices and no longer hesitate to act, or at least to consider the possibility of acting. Regulatory developments and increased

Can you briefly introduce your firm? DRRT is an international law firm and market leader that has been active for more than 15 years in the client-oriented global loss recovery industry as well as a respected resource for ancillary class and group action support. We serve institutional investors in the United States, Europe, and the Middle and Far East with total assets of more than US$ 12 trillion. Our offices are located in Miami, London, Frankfurt and Paris. Our lawyers, financial analysts and experts in securities law and international law speak more than 10 languages. We are pioneers in loss recovery actions outside the United States. Our objective is to monitor collective actions and alert investors when securities in their portfolio are affected. Most investors around the world do not have the time and resources to do so directly. We monitor our clients' portfolios and file claims on behalf of our clients in jurisdictions with passive claims filing. We also advise our clients on the merits of an active collective action where passive claims filing is not possible. We have partnerships with law firms in jurisdictions where collective actions are possible, and we can quickly file cases, having previously undertaken preliminary feasibility studies for the jurisdiction.

demand from investors to protect their assets are leading this change. Concerning more particularly the so-called active actions, everything depends on the courts and the legal framework that has been developed by the authorities. Apart from the United States, the most active jurisdictions are Germany, Japan and the Netherlands. Why did you choose to partner with CACEIS? For us, a partnership with CACEIS makes sense to provide the best service to investors. Indeed, CACEIS is the European leader in custodian banking services. Through this partnership, the Group manages the data of its clients' portfolios and can thus offer them monitoring services for class actions worldwide. We also have a number of common customers with CACEIS, particularly in France, Germany, Luxembourg and Ireland. Once a CACEIS client subscribes to our joint offer, CACEIS periodically sends us the positions and transactions of the securities in its portfolios. This collaboration allows us to serve in the clients’best interests, in complete security and with the full support of DRRT and CACEIS, both for claims filing as well as for active participation. This innovative joint offer with CACEIS is easy to access. It exempts clients from any administrative procedures, while providing clients with the confidence that all possible loss recovery opportunities are properly explored

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CACEIS, key player in agricultural commodities futures

CACEIS is strengthening its ties with sis- ter companies in the Crédit Agricole group, France’s leading bank for the agricultural sector, to better support all types agriculture market players, such as farmers, cooperatives, trading companies, exporters, industrialists, processors and agri-food companies. A com- mon objective for the Group's companies ( Caisses Régionales - regional banks, Crédit Agricole CIB and Crédit Agricole's interna- tional locations), is to gain market shares in Europe. This offer provides real value for ag- ricultural sector clients across the world, miti- gating commodity price volatility risk by lev- eraging CACEIS’s futures market expertise. CACEIS operates on key agricultural futures markets worldwide, including Euronext (for- merly MATIF), CME-CBOT, Minneapolis Grains Exchange, ICE Futures Europe and US. Our teams have experience trading in a wide range of products such as milling wheat, corn, rapeseed, soybean, soybean meal, soybean oil, sugar, coffee, cocoa, cotton, salmon and dairy products. "Our clients can place orders over the phone in five languages via our specialised agricul- tural commodities trading desk, or they can use an e-trading platform. We run a system based on open architecture that allows us to use their preferred platform: Bloomberg, Fidessa, etc. In addition, OLIS AGRO, our mobile app has a secure messaging function which enables users to place orders on agricultural commodities," adds Jean-Loïc Bégué-Turon.

provided by agricultural market experts, a single point of entry for order processing, secure automated processing and simple ac- tivity monitoring via detailed daily reports either sent by email or accessible online. CACEIS’ teams also keep clients up-to-date on market news and developments via regu- lar newsletters. "Our offer is designed to provide the flex- ibility necessary to tailor it to clients’ indi- vidual needs, whatever the agricultural sec- tor," explains Laurent Cavanna , Business Development Manager Commodities at CACEIS. Clients with high futures market trading volumes may benefit from additional value- added services: "Our standard clearing ser- vice can be upgraded to include transfers of data files specifically designed to enable ag- ricultural operators to better monitor trad- ing positions and regulatory compliance sta- tus. Such files can be sent automatically to the client at a defined frequency, or as real- time feeds directly into their positions risk management software," explains Jeannine Busserolle , Relationship Manager in the Commodities Division. The agricultural commodities offer is a part of CACEIS' comprehensive execution and clearing service on derivatives and OTC markets, and is part of its market-leading ‘execution-to-custody’ model

©Yves Maisonneuve - CACEIS

From left to right : JEAN-LOÏC BÉGUÉ-TURON, Head of Clients Commodities, JEANNINE BUSSEROLLE, Relationship Manager in the Commodities Division and LAURENT CAVANNA, Business Development Manager Commodities, CACEIS

With its full range of services on agricultural commodities futures for hedging transactions, CACEIS is a key partner for the agri-food sector.

C ACEIS is a centre of excellence for execution and clearing of derivatives, futures and options on agricultural com- modities. The service extends across the world’s agricultural derivatives markets, meeting the ex- acting needs of agricultural and agri-food sec- tor players. With a specialised team of expert staff covering sales, front-office, back-office and risk aspects, CACEIS exports its success- INTERVIEWWITH JEAN-LOÏC BÉGUÉ-TURON, HEAD OF CLIENTS COMMODITIES As agricultural commodities futures market specialist, our objective is to demonstrate our market-leading expertise and the cutting-edge services designed to suit all types of client working in the European agri-food sector. Our team’s combined experience and the group’s position as France’s premier provider of services to the sector gives our clients a significant competitive advantage and puts us in a strong position to win newmarket share in European countries such as Italy, Switzerland, Germany, Netherlands and Spain. Crédit Agricole’s international banking network is key to our European development strategy, providing market access and a solid platform for growth. We also take part in the agricultural sectors’principal trade fairs, exhibitions and conferences such as the Agro Paris Bourse, the Paris Grain Day and the European Grain Exchanges. We will be exhibiting at the International Paris Bourse in June and look forward to the opportunity to meet agriculture players at our stand and discuss their development plans. What is your international development strategy?

ful French-market model to international mar- kets via Crédit Agricole’s international banking network. "In 2017, we set up a specialised business line to better meet the specific needs of our over 1000 clients in the agricultural sector," says Jean-Loïc Bégué-Turon , Head of Clients Commodities.

CACEIS' execution and clearing offer has many advantages - dedicated client service

N 0 . 57 - April 2019 - caceis news 5

CLIENT TESTIMONY - AGRIAL Philippe VINCENT, Head of Grain Sector and Mathieu PACTON, Head of Commercialisation

acquired Sigma Terme, and as we are active on the futures markets on a daily basis, we are in constant contact with CACEIS’trading room. What advantages does CACEIS offer over other players? With CACEIS, we have dedicated contacts and access to numerous agricultural market specialists which gives us a significant competitive advantage. Not only are the teammembers available when we need them, but they have the specialist knowledge required to develop efficient solutions that meet our particular requirements. Reliability is also key, and we have been able to build a strong relationship with CACEIS based on mutual trust. Finally, CACEIS’offer is fully integrated with the Credit Agricole group’s wider offer, which facilitates all interactions, as Credit Agricole is one of our major partners

one of France’s top three agricultural cooperatives, and has a footprint covering Europe, Africa and the US. Our group has a turnover of €5.5 billion and operates in 15 countries with 22,000 employees. We support the development of responsible and efficient agriculture to meet the expectations of our customers and consumers and thus contribute to the success of our 13,000 farmer members. How are CACEIS’ services benefitting your business? For Agrial, cereal collection accounts for annual volumes of some 1.65 million tonnes, and to protect member’s margins from the effects of agricultural commodity volatility we trade on futures markets. We do this via CACEIS' execution and clearing offer for cereals and oilseeds, and for commodities such as wheat, we are operating on Euronext's Matif. CACEIS became our service provider at the end of 2016 when it

Could you give us an overview of your cooperative business? Agrial is an agricultural and agri-food cooperative that processes and markets milk, fresh fruits and vegetables, beverages, cereals and meat on behalf of its members. Fro its origins in Normandy, Agrial has grown steadily to become

INTERVIEWWITH PHILIPPE CHAPUIS, DIRECTOR OF AGRI-FOOD, CRÉDIT AGRICOLE S.A.

INTERVIEWWITH JEAN-CHRISTOPHE ROUBIN, DIRECTOR OF AGRICULTURE, CRÉDIT AGRICOLE S.A.

In your view, how does CACEIS’ agricultural commodities offer helpmeet the industry challenges? Agricultural holdings are increasingly exposed to external risk such as climate, market, health and environment but also to internal risk of decisions taken at an individual level. The long‘investment duration’and capital-intensive nature of farming increasingly require players to strengthen their ability withstand such risks. With 80% of French farmers banking with Crédit Agricole, our regional banks finance

How do CACEIS’services help agri-business players meet market challenges? By their nature, agricultural commodities demonstrate high price volatility and agri-business players from throughout the sector, from upstream agriculture to downstream collectors, processors and exporters must take steps to limit this inherent structural risk. Producers face significant risk to margins and consequently income when prices fall between sowing and harvesting times. Processors face similar issues, where for example a flour miller has difficulty passing on sudden wheat price spikes to clients, such as large retailers. This is why services designed to mitigate commodity price volatility risk are so

and support farms and agricultural projects across the industry. Expanding our range of products and services to increase their financial stability is a key objective for our group. Agricultural commodity hedging is an offer developed by CACEIS for farmers, and is fully integrated with our broader support package, just like our insurance products (climate, turnover) or our precautionary savings (new deduction system for precautionary savings). CACEIS' upcoming launch of an online order placement service via Crédit Agricole's "Invest Store" portal, is designed to meet farmer clients’needs and integrates smoothly with our model, meeting our objective of further digitising our services and improving the overall client experience.

important to agriculture industry players regardless of sector. Crédit Agricole is the premier French agricultural bank and the number one partner for agri-food companies in France. It offers its agriculture sector clients access to a full range of price hedging services via an offer developed with CACEIS. The professional teams staffing CACEIS’agriculture- related offering have the necessary industry knowledge and expertise to tailor the hedging services to each client’s individual needs. Clients can rely on CACEIS services to manage market positions within a strict legal, regulatory and governance framework. How does CACEIS’agriculture offer fit into Crédit Agricole’s international development strategy? Crédit Agricole’s objective is to export its home-grown expertise in services to agriculture to newmarkets where we have already established banking subsidiaries. In fact, as the agriculture and agri-food sectors are such a key development area for the group, they are the springboard for our entire international development strategy. Our subsidiaries in Ukraine, Poland, Serbia, Morocco and Italy, have each recruited‘agri-agro’experts to their staff and formed teams that are dedicated to supporting local players and boosting their competitive advantage. Like in France, in addition to CACEIS’hedging services, our local teams have access to a group of business engineers, specialised in sectors such as wine, meat, milk and grains via Foncaris, Crédit Agricole’s financial guarantee firm. Crédit Agricole already has a positive brand image as a leading bank for the agriculture sector, and these new commodity market services provided via CACEIS will further raise our reputation abroad and help the group further develop the client base. We believe our development strategy is already showing positive results, and we are delighted that Crédit Agricole Ukraine was recently cited as the country’s best agriculture and agri-food bank.

SHERPA: A NEW APP TO MAKE SIGNING IN TO OLIS EASIER AND MORE SECURE

CACEIS’ Sherpa app, available on Apple Store and Google Play, uses the power of the smartphone to let users sign in to OLIS faster and more safely. Users can set up OLIS Sherpa to use their work email address, which when entered on the OLIS site, triggers a pop-up notification from the OLIS Sherpa app on the smartphone. By confirming their identity using the phone’s Touch ID or Face ID function, or a 5-digit PIN, users are automatically signed in to OLIS on their computer. Sherpa replaces DIGIPASS, as the authentication method for OLIS input functionalities. The Sherpa app was developed as part of CACEIS' digital transformation program, and designed based on client feedback from CACEIS’ collaborative ‘Innovation Lab’ platform. The CACEIS Innovation Lab will lead to further collaborative developments for future OLIS functionalities. OLIS Mobile’s Sherpa app is available to users as part of the OLIS suite which includes OLIS Mobile Funds, OLIS Mobile Share, and OLIS Mobile Agro

*Touch id : authentification via the user's finger print **Face id : authentification using facial recognition *** PIN Code : authentification via a 6-digit code

MATHIEU ALIA, Group Head of Digital Transformation, CACEIS

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Report for French Real EstateWealth Tax on TEEPI

CACEIS extends the range of reports it offers institutional investors on TEEPI, the Electronic Exchange Platform.

 the percentage of holdings represented by property or property rights,  the value of the property or property rights held outside of France,  the date of the Net Asset Value for the calculation. Asset managers were asked to submit data files in February 2019 that enable insurers to consolidate such data and send it to their in- dividual clients. The IFI report adds to TEEPI's already ex- tensive range of reports covering Solvency, PRIIPs and MIFID. It demonstrates TEEPI's position as a key platform for financial in- dustry file exchange and the capabilities of CACEIS’ teams to work closely with clients to rapidly develop and implement working solutions to their needs. TEEPI’s upcoming development projects is for the EET (European ESG Template), a report currently being defined by FinDatEx (Financial Data Exchange Templates)

T he French Real Estate Wealth Tax (IFI) was established by the French Loi de Finances that came into force on 1 st of January 2018. It replaced the ISF ( Impôt de Solidarité sur la Fortune ) and applies to the real estate assets of taxpayers, i.e. real estate held directly (house, building, etc.), property held indirectly (shares in Société civile im- mobilière - SCI, Société civile de placement immobilier - OPCI ), and real estate shares. Life insurance companies sought to gather necessary data from management company partners to enable their retail clients to list funds with over 20% of real estate assets in their 2019 income tax returns. As a result, CACEIS has developed this report for TEEPI clients. CACEIS mobilised its teams in January to work together with a group of insurance company clients in order to design the appro- priate structure that includes:

BLAISE DUCHEMIN, Group Digital Solution Manager, CACEIS

Solvency II Directive, an operational model still working itself out

Despite its January 2016 implementation date, Solvency II, aimed at insurance and reinsurance companies, has not yet been fully implemented, especially in terms of the calculations and the Solvency Capital Requirement. ManCos and insurers still hesitate between carrying out calculations on a fully in-house basis or partially outsourcing them.

©Yves Maisoneuve - CACEIS

S olvency II stands on three pillars: The first is risk-based capital requirements, the second - organisational require- ments for governance and risk management, and the third-transparency, requiring various local and European reports. The TPT file standard provides all information required to fulfil these obligations such as calculation of the SCR - Solvency Capital Requirement, investment monitoring and QRT production. CACEIS offers a modular service that al- lows management companies to provide the reporting required by insurance companies, and allows insurers to obtain a consolidated and uniform statement of their assets, ac- companied by the calculation of aggregates relating to the gross market SCR. Clients do not need to get involved in this process, other than in exceptional cases. ASSET TRANSPARENCY The first key step is to make any underly- ing packaged products transparent, which allows individual assets to be consolidated within the portfolio, whatever the investment vehicle (e.g. UCI, OTC derivative, securiti- sation vehicle). For insurance companies, transparent portfolios can represent thou-

+3,500 TPT FILES SOLVENCY II +1,000,000 UNDERLYING ASSETS

PIERRE OGER, Group Product Manager, CACEIS

sands of asset holdings, so efficient, indus- trial processes are essential. CACEIS values nearly 9,000 portfolios that can be used to help value top level portfolios, if the relevant management companies agree. "We then act on the client’s behalf via TEEPI to rectify assets without a valuation using the standard TPT file format," adds Pierre Oger , Group Product Manager at CACEIS.

on investment assets is consistent and stand- ardised, no matter which issuer provided the TPT file. THE SIX SOLVENCY CAPITAL RATIO CALCULATIONS Depending on the asset in the transparent inventory, the final part of the offer covers the stress test calculations recommended by the regulator. The stress test calculations are carried out on CACEIS’ proprietary risk management platform, which was assessed by a third party audit firm.

DISSEMINATION

+200,000 REPORTS +30,000 ISIN CODES +300 COMPANIES

ENHANCED HOLDINGS INFORMATION

In the second step, holdings information from diverse sources is consolidated and re- published together with data from CACEIS’ master data repositories. This ensures data

At the end of the process, all information is disseminated via TEEPI

N 0 . 57 - April 2019 - caceis news 7

Artificial intelligence: what impacts for fund management? CACEIS, in association with Funds Europe, solicited its clients' opinions on the impact of Artificial Intelligence in the fund industry. 270 fund management professionals responded to this survey.

F unds Europe and CACEIS iden- tified several major trends in the application of Artificial Intelli- gence to the fund sector:  80% of respondents consider that artifi- cial intelligence and data integration are tools that will be used in the future by all managers;  66% say that artificial intelligence brings benefits to the front, middle and back-office;  The main obstacles to the application ofAI are the lack of maturity in the tech- nology and the yet, limited number of use cases that demonstrate how it can

be applied;  24% of respondents stated that key decision- makers do not always understand how artifi- cial intelligence will bring value to clients;  40% have already started their research and development projects in artificial intel- ligence, while 11% will launch them within the next 12 months. CACEIS considers that artificial intelligence not only offers advantages which can benefit our clients, but also the possibility of reliev- ing its employees of repetitive tasks and low added value to guide them towards func- tions that really require human interaction. In many cases, artificial intelligence can be

considered a valuable partner, thus increasing individual capacities.

The full study produced by the Funds Europe and CACEIS teams is available in paper for- mat on request, or online at caceis.com

In the press - Q1 2019

January 2019

February 2019

March 2019

February 2019

Agefi Hebdo “ La blockchain va digitaliser les titres non cotés ” Lionel Barthélémy, Deputy Managing Director, CACEIS Corporate Trust

Les Echos “ Le Crédit Agricole se renforce dans les services

Funds Europe “The future of Asset Servicing” Pierre Cimino, Group Head of international development, CACEIS

Fund Global Asia “Private Equity in China” David Li, Managing Director, CACEIS Hong Kong

de conservation de titres ” Jean-François Abadie, CEO, CACEIS

©Yves Maisoneuve - CACEIS

Conferences - Q2 2019

LONDON

DUBLIN

MADRID

29 May Mondo Institutional ROME

14-15 May BAI Conference FRANKFURT

PARIS

25-27 June Fund Forum International COPENHAGEN

18-20 June ISLA

16May Conférence des Investisseurs pour la Croissance

14 June Bourse Internationale de Paris

7-8May ALFI London Cocktail & Conference

20 June European Fund Finance Symposium

17May 0100 Private Equity Conference

23May IFIA Annual Global Funds Conference

8 caceis news - N 0 . 57 - April 2019 Worldwide

Europe

Country Focus Germany

Source: EFAMA - April 2019

Net assets (domiciliation of funds) Q4 2018 (€ billion)

Worldwide Investment Fund Assets Q4 2018 (€ trillion)

Total net assets of the European investment decreased to €15.15 trillion at end Q4 2018, representing a drop of 5.5% since Q3 2018. With €9.84 trillion invested in UCITS, this segment accounted for 61.3% of total European investment fund assets at end Q4 2018, with the remaining 38.7% (equivalent to €5.87 trillion) coming from AIFs. €15.15tr -5.5% /Q3 2018 Net assets of the European Fund industry Q4 2018 (€ trillion)

-2.38% /Q3 2018

€2.04tr

-5.68% /Q3 2018

Worldwide investment fund assets decreased by 5.68% in the fourth quarter of 2018. €43.99tr

1683

1,934 1,962 2,009 2,038 2,027 2,056 2,096 2,037

2018

2016 2017

Trends by investment type Q4 2018 (€ trillion) On a euro-denominated basis, worldwide equity fund assets decreased by 11.38% to €17.6tr at Q4 2018. Bond fund net assets remained stable at €9.3tr. Balanced/mixed fund assets decreased by 6.1% to €7.6tr. Money market fund assets increased to €5.3tr at the end of Q4 2018. At the end of Q4 2018, 40% of worldwide regulated open-ended fund net assets were held in equity funds. The asset share of bond funds was 21% and the asset share of balanced/mixed funds was 17%. Money market fund assets represented 12% of the worldwide total.

Net assets decreased by 2.8% in the fourth quarter of 2018, compared to a decrease of 5.5% in Europe.

Top Ten at Q4 2018

Ireland € 2.4 tr

Luxembourg € 4.07 tr

2017 2018 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Source EFAMA

Net sales of AIFs in 2018 (€ billion)

Germany € 2.04 tr

France € 1.81 tr

Germany

NET ASSETS VARIATION

NET ASSETS

Ireland

Cyprus 1 1 1 1 Austria Switzerland 2 2 Luxembourg

€17.6tr €9.3tr €5.3tr €7.6tr

-11.38%

Equity

Netherlands € 827 bn

UK € 1.49 tr

Bonds

United Kingdom Liechtenstein Malta

Money Market

In 2018, AIFs domiciled in Germany captured 75% of the total net sales of AIFs in Europe, i.e. €128 billion.

+2.75%

Sweden 0.5

Sweden € 333 bn

Switzerland € 539 bn

-6.1%

Balanced

Source : EFAMA

Total net assets under management (AuM) as at 31 December 2018 (€ billion)

0 2000 4000 6000 8000 10000 12000 14000 16000

€

Spain € 286 bn

Italy € 302 bn

The investment companies represented by the BVI * manage assets of €2.9 trillion on behalf of over 50 million private and institutional investors.

2,997 2,954

2018

2017

2,801

Discretionary mandates Open-ended Spezialfonds Open-ended Retail funds Closed-ended funds

379

Net cash flow to Investment Funds - Q4 2018 (€ billion)

353

2,600

Net Sales of AIFs - Q4 2018 (€ billion) -37.84% /Q3 2018

403

2,383

378

-28.99% /Q3 2018

€120bn

€23bn

363

2,104

2,037

318

1,594

1,832 1,783

325

1,619

1,482

1,706

307

286

Worldwide net sales of open-ended funds decreased to €120 billion in Q4 2018, compared to €169 billion in Q3.

1,339

289 1,505

325

AIFs recorded net sales decreasing to € 23 billion in Q4 2018, compared to € 37 billion in Q3.

1,231

1,070

982

815

846

729

694

640

635

502

1,022

974

916

883

789

730

710

651

652

716

576

193 169 120

2009

2010

2012 2013

2011

2008

2014 2015 2016 2017 2018

2017

2018

2017

2018

* Source: BVI (BVI, the German investment funds association, compiles reliable and comprehensive statistics about the German investment market based on the original data from its members)

Publishing Director: Eric Dérobert - Editor: Corinne Brand +33 1 57 78 31 50 corinne.brand@caceis.com - Design: Sylvie Revest-Debeuré Photos credit: Notified on pictures - Printer: GRAPH’IMPRIM certified Imprim’vert®. This document is printed on Cyclus paper, 100% recycled fiber, certified Blaue Engel, Nordic Ecolabel and Ecolabel européen - Number ISSN: 1952-6695. For further information on our products and services, please contact your Business Development Manager. This newsletter has been produced by CACEIS. CACEIS cannot be held responsible for any inaccuracies or errors of interpretation, which this document may contain. www.caceis.com

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